Monday, September 24, 2007
iPhone v2 is rumored to be another design win for Infineon (IFX). While I will come up with a detailed article analyzing this soon, I do, in particular, want to mention that the deal between Apple (AAPL) and Interdigital (IDCC) may not be a fixed royalty deal (widely known as IDCC's business model).
- The $2 million increase in the guidance that seemingly is the basis behind the $56 million calculation may after all be royalty for the 2G phones sold through this quarter.
- On the 3G front, the royalty from IP itself may be higher, so that number may increase next quarter and beyond.
- Most importantly, in the event of Infineon getting the design win, iPhone will be using substantial contributions of Interdigital from both the software protocol stack and the design. Besides, Infineon has a per-chip royalty agreement for these two pieces.
In summary, the deal with Apple is a great sign for Interdigital, whose iPhone link I had suggested a few months ago. And that may not be the only money that IDCC would be making off the iPhone. I am currently working on a more detailed version of this article with some numbers to make my case. If anyone has any particular questions or issues that you wish I look at, please let me know.